Clean up LIC of India's Balance Sheet for its IPO!

 Source: https://www.hindustantimes.com/business-news/india-to-hire-deloitte-sbi-caps-to-help-lic-prepare-for-ipo/

India to hire Deloitte, SBI caps to help LIC prepare for IPO

The coronavirus pandemic has prompted the administration to boost market borrowing as revenue slumped following a nationwide lockdown.

BUSINESS Updated: Aug 22, 2020 09:59 IST

Bloomberg| Posted by Susmita Pakrasi

Bloomberg
The government will soon invite bids seeking firms to value LIC, the people said asking not to be identified citing rules on speaking to the media.(REUTERS)

India is poised to hire Deloitte Touche Tohmatsu India Ltd. and SBI Capital Markets Ltd. to help Life Insurance Corp. of India prepare for an initial share sale, people with knowledge of the matter said.

The advisers will help evaluate the capital structure of India’s biggest insurer as well as aid the company in reworking its financial statement, according to a tender document issued in June. The government will soon invite bids seeking firms to value LIC, the people said asking not to be identified citing rules on speaking to the media.

Prime Minister Narendra Modi’s government is keen to go ahead with the initial public offering -- potentially India’s biggest -- to help plug a widening budget gap. The coronavirus pandemic has prompted the administration to boost market borrowing as revenue slumped following a nationwide lockdown.

A spokesperson for the Ministry of Finance couldn’t immediately be reached outside business hours.

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In light of the above-mentioned report, we, the resigning ex-employees would like to appeal to the external auditors to examine whether LIC of India accounts for the amounts it repudiates in respect of the Wage Revision Arrears, as well as the difference in Statutory Retirement Benefits payable like Provident Fund and Gratuity; in its Balance Sheet; every time that a wage revision takes place in the Corporation. 

LIC of India repudiates these payments through insertion of a Clause 31B in the Wage Revision Charter. This clause has been declared to be 'Ultra vires' by the Supreme Court in its judgment in 2007, yet LIC of India, in gross CONTEMPT OF COURT, keeps including it in all its Wage Revision Charters!

An Accounts Officer in the Corporation had nonchalantly told me that since these amounts aren't payable, as per the Charter, they are not at all accounted for, in the Statements of Accounts of the Corporation! 

This is a clear case of omission and commission!

For LIC of India, it is a matter of 'Out of sight, out of mind and out of the Books of Accounts too!' as far as the resigning ex-employees are concerned!

This means that the repudiated amounts of several crores of rupees have conveniently been omitted in the Liabilities section of the Balance Sheet of the Corporation since 1st August, 1997, more than two decades, since when LIC of India has been illegally repudiating the arrears payments.

In effect, the Assets would appear to be wrongly inflated. This skewed Balance Sheet will not give a true picture of the finances of the Corporation, if provisions have not been made for these liabilities.

Interestingly, LIC of India didn't give me any information regarding the amounts repudiated or the number of employees who have been unjustly and illegally deprived of their dues; in response to my RTI appeal.

Had LIC of India accounted for it, it could have given me the information! 

A thorough investigation is needed before the IPO of LIC of India is announced.

The repudiated dues must be paid with interest to all of us at the earliest.

LIC of India commits the same blunder impudently defying Supreme Court judgments!

Arrears repudiated by LIC of India again, despite a Supreme Court judgment in 2007, declaring the said clause of repudiation to be 'ultra vires'!

Excerpt from the Gazette Notification

 MINISTRY OF FINANCE (Department of Financial Services) (INSURANCE DIVISION) NOTIFICATION New Delhi, the 14th January, 2016 G.S.R. 28(E).—

In exercise of the powers conferred by section 48 of the Life Insurance Corporation Act, 1956 (31 of 1956), the Central Government hereby makes the following rules further to amend the Life Insurance Corporation of India, Class I Officers (Revision of Terms and Conditions of Service) Rules, 1985, namely: ─ 1. (1) These rules may be called the Life Insurance Corporation of India, Class I Officers (Revision of Terms and Conditions of Service) Amendment Rules, 2016. (2) Save as otherwise provided in these rules, these rules shall be deemed to have come into force on the 1st day of August, 2012. (3) These rules shall be applicable to those Class I Officers who were in the whole-time salaried service in the permanent establishment of the Corporation on or after the 1st August, 2012: Provided that where any Class I Officer gives a notice in writing to the Corporation, within a period as specified by the Corporation, expressing his option to be governed by the provisions of these rules from a date not earlier than the date on which the said rules come into force and not later than the date of publication of this notification in the Official Gazette, then the Corporation may, by order, permit such Officer to be governed by the said rules with effect from the said date and no arrears for the period prior to the date so opted shall be payable to such officer: 6 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(i)] Provided further that the officers whose resignations had been accepted or whose services had been terminated under rule 39 of Life Insurance Corporation of India (Staff) Rules, 1960 during the period from the 1st August, 2012 to the date of publication of this notification in the Official Gazette, shall not be eligible for the arrears on account of revision. 

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Kindly note that the same clause was there in the Wage Revision Charter of 2010 also, wherein my arrears were illegally repudiated, along with that of scores of other resigning employees like me. In 2012, I had filed an RTI appeal against the Corporation. LIC of India has not given me the full statistics regarding number of ex-employees whose dues have been repudiated since 1997, amounts involved, etc. All the details of my RTI crusade are available on this blog.

Is the Finance Ministry and LIC of India in perpetual limbo? Don't they refer to the Supreme Court's judgments on this issue? Do they think that they are above the laws of this land?

I have been pointing out the Supreme Court's judgment in this blog since 2014! All the judgments on this issue are available easily on the internet. Both, LIC of India and the Government of India are tech-savvy, so it is impossible that they don't know about this judgment and its ramifications!

Is this the right way forward for DIGITAL INDIA? Or even for talented, hard-working and sincere employees like us; to be so unjustly deprived of our legally rightful, hard-earned dues?

Would the Honorable Prime Minister of India please intervene on our behalf and resolve this issue at the earliest, so that all of us long-suffering ex-employees could gracefully get our dues?

All of us would be highly obliged!

LIC of India is a trustee of policyholders' money, not its owner!

Source: https://www.newsclick.in/how-govt-milking-cash-cow-lic-endangering-indias-most-trusted-life-insurer

Govt. is repeatedly turning to LIC for its disinvestment agenda. The insurer’s NPAs have doubled since the Modi regime took over, and now there is the possibility of it bailing out debt-ridden IL & FS.

Praneta Jha 29 Oct 2018

                                              EXCERPT from this article

In any case, LIC chairman VK Sharma has said that IL&FS would not be allowed to collapse and that all options were on the table.

However, the question remains as to why LIC — entrusted with insurance and pension funds of millions of policyholders — should come to the rescue of a disaster that is a case of cronyism, mismanagement, fraud and near-complete lack of accountability and transparency?

Meanwhile, there have already been calls from the industry to privatise LIC, even as it continues to rule the roost in the life insurance market, even after private companies were allowed to enter the business of life insurance in 1999-2000.

Speaking to Newsclick, Amanulla Khan, president of All India Insurance Employees’ Association, said, “LIC goes for long-term investments and does it prudently, and so it usually earns good returns. It is a strong company, but if the present trend continues, it does not bode well for the company’s future.”

He said the union was not too concerned about the IDBI bank deal because LIC had wanted a bank of its own, since “all major banks have their own insurance company and cannot act as our agent.”

But, he said, the business of always being made to bail out troubled companies was not good for LIC’s long-term health and financial stability.

“The government must allow functional autonomy to LIC and let it make its own investment decisions. The government should not interfere or force us. LIC is trustee to its policyholders, after all, and while their money is safe (since it carries government guarantee), the immediate question is, what is going to happen to the future returns on the policyholders’ investments? Is this the wisest way to invest the hard-earned money of the people who have taken life insurance from LIC? What will happen to LIC’s future?”

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Kindly read this interesting article fully at the link given above.

Excerpt from my RTI Second Appeal

EXCERPT

The Life Insurance Corporation of India which is a trustee of billions of rupees of the policyholders does not deem it necessary to maintain transparency in its dealings. It does not provide a rationale to its decisions, which is very dangerous for a Public Authority of its stature, where millions of employees and policyholders are being governed by its decisions. It is not behaving in a responsible and accountable manner.

If it can get away with repudiating billions of rupees due to its resigning employees as arrears, since 1997; I shudder to think about what could happen to the policyholders’ insurance policies worth billions of rupees, in future? What is the guarantee that such a huge Reserve Fund is safe with such an insurer that makes decisions arbitrarily or doesn’t maintain its records meticulously?

I also pity the other employees and policyholders who must be facing the nightmare of not getting information under their RTI queries, from LIC of India.

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VERY IMPORTANT

I have received the names of 45 employees (Class I Cadre) who were denied the arrears’ payment by LIC of India in this Charter dt. 2010; (5 pertaining to the WZO and 40 pertaining to the Central Office) through this RTI Application. This is incomplete information and the Corporation is unwilling to part with the statistics pertaining to the Corporation as a whole. But one can assume that approximately 25 employees of Class I cadre and 25 employees of the Class II Cadre have been denied the arrears’ payment in each Divisional Office of LIC of India.

According to the replies of the CPIOs and the FAAs of the Corporation, to my RTI query no. 3, LIC has 115 Divisional Offices, 8 Zonal Offices, 9 Audit Centres, Central Office and MDC spread all over India, thus there are 134 offices of LIC of India. Assuming that 6240 employees have been denied arrears’ payment in this Charter dt. 2010, and an equal no. of employees have been denied arrears’ payment in the Charters dated 2000 and 2005; approximately18720 employees have been denied arrears’ payment.

If each of these employees was supposed to have got Rs. 4,00.000/- the amount repudiated totally works out to a staggering Rs.74,88,000,000/-. (This is a very conservative estimate. The actual amount may be higher, depending on the actual number of resigning employees who have been denied arrears payment and difference in Retirement Benefits; and the revised wages of the resigning employees in the Higher Management Cadres of LIC of India.)

Where has all this money gone and how has it been accounted for in LIC of India’s Financial Statements? Has it even been accounted for, at all, by LIC of India, considering the fact that it does not have records of repudiated amounts due to its resigning employees as per its own admission, in reply to my RTI queries?

No wonder, Sri K. Rajivan Nair, Regional Manager, (CRM/CPIO) WZO, LIC of India, told me in his SELF-PROFESSED “OFF THE RECORD” phone call to me, FROM THE ZONAL OFFICE LANDLINE NUMBER on 30-03-2012, that “ASKING FOR ANSWERS FROM LIC IS LIKE BREAKING YOUR HEAD AGAINST A WALL. LIC WILL NOT ANSWER ANY OF YOUR REMAINING QUESTIONS. WE DO NOT WANT TO OPEN A PANDORA’S BOX BY REPLYING TO YOUR QUESTIONS.”

END OF EXCERPT

Read the full text of my RTI Second Appeal in my blog dated 18th August, 2014.

Interestingly, the CPIO, Central Office, LIC of India, admitted in her written response to this appeal that there is no reason on LIC's records; to repudiate our wage revision arrears!

So LIC's decision to repudiate our wage revision arrears is arbitrary! Not acceptable for an organization of LIC's stature!

In fact, not acceptable for any other enterprise too! 

Employees are assets and not disposable commodities. 

If there is no rationale for repudiation, why have the arrears been repudiated? Wages are our constitutional rights. Pay up, LIC of India. PRONTO.

IPO of L.I.C of India

Here's an excerpt from an interesting article in The Print:

Source: https://theprint.in/opinion/lic-to-tax-charter-budget-2020-wants-india-in-the-big-league-but-offers-mere-quick-fixes/3583

LIC to tax charter: Budget 2020 wants India in the big league, but offers mere quick fixes

RENUKA SANE 1 February, 2020 6:34 pm IST

LIC listing

Finally, the Initial Public Offering of the LIC is perhaps the boldest announcement in this Budget. This will only be possible if investors are able to see what is on LIC's books. For example, the LIC would have to tell us the scrip-wise cost of investments over (at least) the last decade, and the current market value of these investments. A lot of this detail today remains unavailable. A move to the new accounting standards, IndAS, will mean that profit will have to be booked as the difference between fair market value (as opposed to the current book value) and actual sale. The Modi government will need to have the appetite to deal with skeletons that may emerge from the LIC's closet and also be ready to lose the all-weather buyer for its own offer for sale and other transactions. This requires serious appetite for reform.

International Labor Day - A Day of Reckoning for L.I.C of India

This International Labor Day, L.I.C must be brought to book!

Dear friends,

                    

                  Today should be the day of reckoning for L.I.C of India, our ex-employer, which has unjustly deprived us of our rightful dues, since more than two decades. It must come to its senses today, wake up and undo its wrong-doing towards us. Will this International Labor Day prove to be lucky for us, or just fade away into History like the past ones?                   

All of us must unite and collectively fight for our legal dues, with all our might. Let's wake up the sleeping giant!                                                                                                                                                                                                            

Priya

P.S. This post was carried nearly verbatim, last year too, on this day! How many more of such International Labor Days must pass by, for L.I.C to come to its senses, undo its wrongdoings and bestow justice; regard the Supreme Court's judgments for a change?        

It's high time that the Prime Minister and the Finance Minister stepped in, to put in a strong word for the long-suffering, resigning ex-employees.        

Now that the concerned agencies are cracking a whip on the white-collar criminals, why not do the same with L.I.C? After all, it has been illegally repudiating our dues regularly, since 1997!

Consider this extract from a Supreme Court judgment, in 2007: 

SC - "Proviso of Para 3 is struck sown ultra vires"

 K. S. Raina.                                                                                       -      ------------Petitioner.

                        Versus

Union of India and others.                                                                         --------Respondents.

Coram:

The Hon’ble Mr. Justice Rajiv Sharma, Judge.

Whether approved for reporting?*                                    Yes.

For the Petitioner:                                                  Ms. Ranjana Parmar, Advocate.

For Respondent No. 1:                                         Ms. Shilpa Sood,

Central Government Counsel.

For Respondents No. 2 & 3:                                Mr. Ashwani Sharma, Advocate.

Rajiv Sharma, J.

It has come in the supplementary affidavit filed on behalf of respondent No. 2 that the wage revision of the employees of the nationalized insurance companies follows a periodicity of five years, i.e. 1^st August 1987, 1^st August 1992, 1^st August 1997 and 1^st August 2002. Thus, it is evident that in normal circumstances wage revision should have taken place in the year 2002 instead of 2005.

Classification made by the employer on the basis of seeking premature retirement on the basis of two sets of retirement schemes is not sustainable being irrational and discriminatory. 

The petitioner has a constitutional right to get his pay including the revision in the pay scale and it is settled law by law the fundamental rights can neither be waived off nor bartered away.

The action of the respondents is not supported by any rational basis or intelligible differentia.

In the present case the petitioner was in fact in employment as on 1^st August 2002, the date from which the Notification (Annexure P-4) dated 21^st December 2005 has been made applicable.

Consequently, in view of the observations made above, send proviso of Para 3 of the Notification dated 21^st December 2005 is struck sown being ultra vires to the extent it deprives the petitioner and other similarly situated persons to get the benefit of revised pay scale with effect from 1^st August 2002 after applying the principle of severability.

According, the petition is allowed. The petitioner is held entitled to get the revised pay scale corresponding to his post he was occupying as on 1^st August 2002 till 15^th March 2004. The respondents are directed to work out the arrears etc. within six weeks from today.

December 3, 2007                                                                                      (Rajiv Sharma), J.

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Source: Supreme Court and High Court judgments relating to Insurance. 

Awaiting positive results from LIC of India in the NCOVID -19 Era!

 In this period of the dreadful pandemic arising out of the highly infectious Novel Corona virus - 19, the whole world is witnessing a lock-down of unprecedented proportions. Governments have asked employers to be considerate and pay their employees full wages despite them being at home due to the lock-down restrictions.

Isn't it ironical then, that we, the resigning ex-employees of the reputed Life Insurance Corporation of India are still awaiting the payment of our arbitrarily and illegally repudiated Wage revision Arrears and difference in payments of Statutory Retirement Benefits like Provident Fund and Gratuity; since 1997? We who have actually worked for long hours during the period for which the payments have been repudiated, have been swindled of our hard-earned money despite being on the wage-rolls of the Corporation; despite a Supreme Court's verdict ordering the payments to be made!

Wages are the fundamental rights of employees. They can neither be waived away or bartered away. They are Constitutional Rights. We have just celebrated the Birth Anniversary of the great leader and drafter of our Constitution, Dr. B.R.Ambedkar on the 14th of April. While remembering him and honoring his memory, LIC of India must recollect and rectify its great injustice towards all of us resigning ex-employees, whose dues have been repudiated cruelly, arbitrarily and illegally by it.

Likewise, the Government must also do its duty of directing the Corporation to make amends to rectify its blunder!

Now that everyone is at home, and has enough time to introspect and reflect on their wrongdoings, let the Chairman and Managing Board of Directors of LIC of India and the Finance Ministry Officials see new light and decide to pay us all our dues!

All of us will pray for the same.

This is one positive result that we all await with bated breaths and will surely welcome with open arms!